Bond notes law promulgated

Daniel Nemukuyu Senior Reporter—President Mugabe has gazetted Statutory Instrument 133 of 2016, which provides a legal framework for the introduction of bond notes as acceptable legal tender in Zimbabwe. SI 133 of 2016, Presidential Powers (Temporary Measures) Amendment of the Reserve Bank of Zimbabwe Act, empowers the central bank to issue out bond notes using its preferred design, form and material.

Section 44B of the amendment reads: “The Minister may by notice in a Statutory Instrument prescribe that a tender of payment of bond notes and coins issued by the Bank that are exchangeable at par value with any specified currency other than Zimbabwean currency prescribed as legal tender for the purposes of section 44A, shall be legal tender in all transactions in Zimbabwe to the same extent as that prescribed currency.”

In terms of the statutory instrument, RBZ will determine how the bond notes and coins will look like.

“There hereby issued by the Minister in terms of section 44B (1) of the principal Act as inserted by these regulations bond notes in such units as shall be specified by the Bank and whose design, form and material shall be determined by the Bank and notified to the public.”

The Statutory Instrument, for the avoidance of doubt, also covers bond coins that are already in circulation.

“The issuance of the bond notes referred to in the following subsections; and the bond coins in circulation before the promulgation of these regulations, shall be deemed to have been prescribed by the Minister in terms of Section 44A (1) of the principal Act as inserted by these regulations.”

Finance and Economic Development Minister Patrick Chinamasa said SI 133 of 2016 gave the RBZ power to introduce bond notes and coins with a 1:1 rate against the United States dollar.

He said creditors were compelled to accept payment in bond notes. “If one owes you money in United States dollars, you must accept payment in bond notes. You cannot refuse. “One would have discharged his or her obligation to you,” he said.

In a statementissued yesterday evening, Minister Chinamasa said RBZ would now go ahead to introduce the bond notes without any hindrances.

“The Reserve Bank of Zimbabwe will with immediate effect start the process towards issuance of bond notes as a legal tender in Zimbabwe. The process will commence with media publicity to inform and raise awareness of the public on the denominations, design, form, material and security features which are used in the bond notes to be introduced.

“This is to ensure that the public is not duped by fake bond notes that may be circulated into the market by unscrupulous elements in our society,” reads the statement. Minister Chinamasa said the President Mugabe promulgated the law as critical economic recovery measure.

“Given the criticality of the issuance of bond notes as legal tender to the recovery of our economy and also the controversy that has surrounded the subject matter, it has been decided that the legality of bond notes as legal tender in Zimbabwe should be put beyond any measure of doubt. It is to this effect that the President has today gazetted Statutory Instrument 133 of 2016, Presidential Powers (Temporary Measures) (Amendment of Reserve Bank of Zimbabwe Act and Issue of Bond Notes) Regulations, 2016. The measures that have been gazetted under Presidential Powers Regulations will fortify and underpin the existing legal framework for the issuance of bond notes,” he said.

When the Reserve Bank of Zimbabwe is satisfied that the public is sufficiently conversant with the salient features of the bond notes, it will proceed to issue them in line with the Export Incentive Scheme.

The central bank, Minister Chinamasa said, had recommended the Export Incentive Scheme in terms of Section 49 of the Reserve Bank of Zimbabwe Act (Chapter 22:15) to boost the country’s reserves through increased export earnings.

He said the Export Incentive Scheme would therefore remedy the decline of reserves, which had a negative impact on the country’s ability to make prompt settlements of its international obligations.

Minister Chinamasa said under existing legislation the Reserve Bank of Zimbabwe had power to issue bond notes in terms of the provisions of Section 7 of the Reserve Bank of Zimbabwe Act Chapter (22:15).

The bond notes, which are guaranteed by a $200 million African Export Import Bank (Afrexim) loan facility, will be at par with the US dollar. Bond notes will be first introduced in $2 and $5 denominations before gradually rolling out the $10 and $20 notes. The first phase of the bond notes introduction will see $75 million being released by end of December this year.

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You are not wrong….you are dead right. Its the simple laws of supply and demand which mugabe in his hare brain thinks he can defy!!!

Taki

Yes, I agree

Reuben Mukondiwa

So u think if i am selling my car for $8000 and then one comes with bond notes,i sell if for 8000B?Haaa musaite mafunnies iyayo anambwa imimi…Hakuna zvakadaro….US$ will never in any way be par to Bond notes.Ndezvekupenga izvo.With what capacity are they rating the currencies so that they will be par?Problem yeHurumende ndeyekufunga kuti they are dealing with morons and idiots who are just dump and who can just accept any shit.Hatizi mafuza…

“If one owes you money in United States dollars,you must accept payment in bond notes. You cannot refuse.” …..Ndo Economic Illiteracy yatinogara tichitaura yaMugabe iyi!! The man thinks her can legislate and control the laws of supply and demand……sorry, varume, you are fooling yourself!!!

Inga

Herald please take off Moyos ZimAsset document and upload more progressive documents. Ndatenda. All new laws or drafts please share link.

Muzvambarara

Mari yakafanana neRudo harumanikidzirwe pamunhu,,, ,

Mashyline

Lets wait and see where it ends because 2008 the country was near to a civil war, maybe the nation is calling for **this time

bitchsbrew

Tazo** manje. Hohodo!

the 1st Hokage

Indeed Uchiha Madara!

hashiramawoodstyle

Foreign currency from where my rival. The Zimbabwean situation is dire. No production and lost faith in governance is one hell of a combo

Not surprising considering that Chinamasa himself owes the govt. US$19 000 which he would be eager to be converted into bonds

Peter

They say that it’ll only be $200 million. But when it comes time to pay bonuses to civil servants, what will restrain them from printing their way out of a hole?

Zanu Yangu

Correction: I am a banker and the RBZ ordered all banks to surrender all big notes. they did not disappear nut are with RBZ

Semhalo

The US$ and all the other currenies in the basket are mere reciepts in their nature as they are backed by the gold in their owning countries, that on its own makes your augument fall flat on its face. Your patriotic suggestions are not only hollow but myopic as they are not based on any sound economic principle

Observer

Only Choppies and Pick and pay will remain in business everyone else would apply for the hard currency to import and be told to purchase ‘locally’ unless they buy the hard currency at a commission they will fall out of business, the business people are the ones who will ofer the commission to remain in business, the cash barons will just make sure you know he has it. if we are to search ministers houses, they have more than enough US$ in suitcases in their bedrooms, and when ever they will need it they will be given. MY ADVICE TO ZIM CITIZENS IS TO ENSURE TO OPEN ACCOUNTS WITH BANKS WITH BRANCHES IN OTHER COUNTRIES AND GO WITHDRAW FROM THERE, AS ONG THE MONEY IS IN YOUR ACCOUNT IT IS SAFE